TIDMCRW
RNS Number : 8098R
Craneware plc
05 March 2019
Craneware plc
("Craneware" or the "Company" or the "Group")
Interim Results
5 March 2019 - Craneware (AIM: CRW.L), the market leader in
Value Cycle solutions for the US healthcare market, announces its
unaudited results for the six months ended 31 December 2018.
Financial Highlights (US dollars)
-- Revenue increased 15% to $35.8m (H1 2018: $31.1m)
-- Adjusted EBITDA(1) increased 20% to $11.6m (H1 2018: $9.7m)
-- Profit before tax increased 7% to $9.3m (H1 2018: $8.7m)
-- Adjusted basic EPS increased 19% to 30.2 cents per share (H1 2018: 25.4 cents per share)
-- Cash position of $38.7m (H1 2018: $52.2m), following
significant returns to shareholders and investments in the
period
-- Proposed interim dividend increased 10% to 11p (H1 2018: 10p per share)
1. Adjusted EBITDA refers to earnings before interest, tax,
depreciation, amortisation, share based payments and acquisition
and share transaction related costs.
Operational Highlights
-- Supportive market environment as the US healthcare market
evolves towards value-based care, with a critical dependency on
accurate financial and operating data
-- Strong sales activity and opportunities across the product
suite and across all classes of hospital providers
-- Increasing market engagement with our newly launched cloud-based platform, Trisus(TM):
o With 600 hospitals represented at the Craneware Healthcare
Summit, 50% of customers that attended are looking to transfer to
the Trisus platform within twelve months
-- First three Trisus products are now available on general
release with a fourth scheduled for release in the second half of
the financial year
Outlook
-- Strong sales pipeline for the current financial year
-- Total visible revenue over $70.0m for the current financial
year and $196.2m for the three-year period to June 2021 (H1 2018
same three year period: $174.3m)
-- Board confident in outlook for the current year and beyond
Keith Neilson, CEO of Craneware plc commented, "We are delighted
to report another strong set of results, delivering against our
growth strategy. The strength of our trading performance to date
and double-digit rate of growth demonstrate the ongoing momentum we
are experiencing in the business and the growing market opportunity
we see.
"As we enter the second half of the financial year we do so with
excitement as we continue to build the business in line with the
large market opportunity available to us. We believe that the
breadth of our customer base and the quantity and quality of data
within our solutions gives us the opportunity to sit at the heart
of the move to value-based economics; collating and analysing the
information that will support hospital-wide decision making and
ultimately have a positive impact on the quality of healthcare.
"Our growing market opportunity, the strength of our sales
pipeline and increasing long-term revenue visibility, mean we enter
the second half of the financial year with great confidence for the
future and the ongoing success of Craneware."
For further information, please contact:
Craneware plc Peel Hunt Investec Bank Alma
(NOMAD & Joint (Joint Broker) (Financial PR)
Broker)
+44 (0)131 550 +44 (0)20 7418 +44 (0)20 7597 +44 (0)203 405
3100 8900 5970 0212
Keith Neilson, Dan Webster Patrick Robb Caroline Forde
CEO
Craig Preston, George Sellar Sebastian Lawrence Hilary Buchanan
CFO
Guy Pengelley Henry Reast Helena Bogle
About Craneware
Craneware develops and provides financial improvement &
operational optimisation software that enables US healthcare
providers to improve margins and enhance patient outcomes so they
can continue to provide quality outcomes for all.
Craneware is the leader in automated Value Cycle solutions that
help US Healthcare provider organisations discover, convert and
optimise assets to achieve best clinical outcomes and financial
performance. Founded in 1999, Craneware is headquartered in
Edinburgh, Scotland with offices in Atlanta and Pittsburgh
employing over 320 staff. Craneware's market-driven, SaaS solutions
normalise disparate data sets, bringing in up-to-date regulatory
and financial compliance data to deliver value at the points where
clinical and operational data transform into financial
transactions, creating actionable insights that enable informed
tactical and strategic decisions. To learn more, visit
craneware.com and thevaluecycle.com.
Chairman's Statement
We are delighted to confirm another very positive trading period
for the Group, delivering strong financial results and continued
execution of our growth strategy. Revenue increased 15% to $35.8m
(H1 2018: $31.1m) and adjusted EBITDA(1) increased 20% to $11.6m
(H1 2018: $9.7m). Compared to H1 2018, cash reserves have reduced
(albeit remain healthy) from $52m to $38.7m following a $15.4m
share buyback completed in January 2018 and further investments in
the period. Operating cash conversion of adjusted EBITDA remains
strong and was in line with the Company's target of 100% over a 12
month period, with a further $10m of the December 2018 outstanding
receivables collected post period end. Having completed the share
buy back in January 2018, $4.7m was returned to shareholders in
dividends, commission payments increased corresponding to the
previous record sales year and investments of $9.1m in research
& development (including $4.4m which has been capitalised) were
made, all within the period. Sales successes, combined with
renewals continuing above 100% (by dollar value) have delivered
high levels of revenue visibility that support our continued future
growth ambitions.
It is clear that Craneware has an exciting opportunity to
support healthcare providers in the transition to value-based care
and we continue to make good progress with the expansion of our
offering to facilitate the Value Cycle. Developments of note in the
half include the progress towards launch of two further products on
our cloud-based Trisus platform and continued positive results from
the first two customers for our Trisus Healthcare Intelligence
platform. With almost the entirety of our existing customer base
now able to access the power of our new cloud-based platform
alongside our existing on-premise solutions via the Trisus Bridge,
we are confident in the successful long-term transition of all our
products to the new platform.
We are continuing the expansion of our core product suite and
its move to Trisus. Combining these solutions with the data that
the Craneware software has collected over the past twenty years and
the strong relationships we have forged with our customers gives us
the opportunity to sit at the heart of the transition taking place
in the US healthcare industry. Our solutions are providing genuine
insight into the economics of healthcare provision.
Strict criteria continue to be applied to potential acquisition
targets to ensure they enhance our product roadmap and are
accretive to the financial strength of the Group. With our healthy
cash balance, financial position and a $50m funding facility, we
are in a strong position to execute upon our strategic vision.
Our expanding market opportunity, double digit growth rates,
strong sales pipeline and increasing long-term revenue visibility
provide the Board with confidence in achieving a successful outcome
to the current year and beyond.
George Elliott
Chairman
4 March 2019
Strategic Report
Once again, the investments we have made into our people,
products and operations have resulted in another strong trading
performance in the first half of the year. The combination of our
significant expertise and experience in the US healthcare industry,
the data that our solutions have gathered, and the continued
investment into the expansion of our product suite means we are
well positioned to provide the insight our customers need to thrive
in this new era of value-based care and make a meaningful impact on
the quality of US healthcare.
Market and Strategy
The ongoing evolution of the US healthcare industry towards the
provision of value-based care puts the emphasis onto the healthcare
provider to ensure they are delivering the right care, in the right
place and at the right cost for the best patient outcome. This is a
significant shift away from the historic fee-for-service
environment (transactional based per episode of care) and requires
every hospital to have a far greater understanding of their costs,
the value they provide and their impact on the total cost of
care.
The need to drive value in healthcare, and the challenges this
brings, provide an ongoing supportive environment for Craneware due
to our ability to help our customers meet these challenges.
Our strategy is to continue to build on our established
market-leading position in revenue cycle solutions to expand our
product suite coverage of the Value Cycle. The Value Cycle is the
process and culture by which healthcare providers pursue quality
patient outcomes and optimal financial performance, through the
management of clinical, operational and financial data assets. By
expanding our offerings into operational areas of the hospital,
incorporating cost management and combining this with data from the
revenue cycle, we will provide a comprehensive insight into the
management and analysis of clinical and operational data, providing
the best possible outcomes for all.
The expansion of our solutions is being achieved through a
combination of extensions to the current product set; building
products through internal development; targeting potential
acquisitions and partnering with other technology and services
companies.
The breadth of our offering, combined with 20 years of data
within a sophisticated cloud platform, provides us with a strong
competitive position across our target product areas.
Product Roadmap
We continue to make progress in all areas of our product
roadmap: the development of our cloud-based Trisus Enterprise Value
Platform; the continued evolution and support of our existing
market-leading product suite as we migrate to Trisus; and the
development of new products to sit upon the Trisus Platform
including the further development of our cost analytics software.
All of these solutions will increase our coverage of the key areas
of the Value Cycle and therefore increase our addressable
market.
Trisus Enterprise Value Platform
We are now more than a year into the launch of the Trisus
Enterprise Value platform and are experiencing growing levels of
interest across our market. This cloud-based platform provides a
suite of solutions for healthcare providers to identify and take
action on risks related to revenue, cost, and compliance. It is
designed to be versatile and expandable, growing alongside our
customers as the healthcare industry continues to evolve. The
platform provides an environment to gather, process, and deliver
data across the continuum of care with an open architecture and
common components, allowing for synergies between applications.
We are particularly pleased to note how both our existing
customer base and the wider healthcare provider market have
responded positively to the technological evolution of the
Craneware solution set, delivered on the Trisus platform. The
Trisus Bridge, the connector layer linking their existing on
premise Craneware solutions to the advanced functionality of Trisus
in the cloud has proven a valuable introduction to customers on the
potential the Platform can offer them. After positive interactions
with the platform via the Trisus Bridge, available for all our
customers, of over 600 hospitals that were represented, 50% of
customers that recently attended the Craneware Healthcare Financial
Summit are looking to transfer to the Trisus platform within twelve
months. This provides us with confidence in the successful
long-term transition of all our products and customers to the cloud
platform. As we have seen other smaller cloud-vendors also making
good progress in the US healthcare market, we believe this
demonstrates that there is a growing acceptance by our industry for
the cloud.
Good levels of sales continued in the first half for Trisus
Claims Informatics. Having been released in an early adopter
version last year, Trisus Supply, was recently launched and will
join Trisus Pricing Analyzer(TM) and Trisus(R) Healthcare
Intelligence on the platform. With Trisus Supply, providers can
ensure their high-dollar medical devices and supplies are accounted
for, managed, and reimbursed properly increasing both compliance,
transparency of cost and revenue. While Trisus Pricing Analyzer(TM)
assists healthcare organisations to create transparent, defensible,
and competitive pricing strategies.
We are executing on a roadmap to migrate all our solutions onto
the Trisus platform, as well as continuing to look for innovative
combinations of our data sets into new unique product offerings. As
part of this roadmap we expect to see further hybrid solutions
combining: the best of existing software regardless of the
development origin, including outside of Craneware; elements of the
Trisus platform; new Trisus products; and new early adopter Trisus
enabled versions of other existing solutions.
Trisus(R) Healthcare Intelligence
Trisus(R) Healthcare Intelligence is a cost analytics decision
support tool that integrates revenue, cost, clinical, and hospital
operational information for each patient encounter, throughout the
journey of their medical condition, accumulating all patient costs
from patient activities and services consumed during their care.
The aim of the tool is to provide our customers with an
understanding of the true cost of every episode of care given to
their patients.
Most hospitals' accounting systems account for cost in aggregate
and average these, allocating cost on a volumetric basis. This
structure, while useful in a fee-for-service system, does not
adequately support the shift to quality-centric healthcare delivery
system that provides true value where a greater degree of insight
and thereby more granularity of the data is required.
Our initial customers for this solution are fully implemented
and using it to improve the operations of their hospitals. From the
pipeline of opportunities that have grown for this product we are
very pleased with the effectiveness of our investment in this
product area and believe that we will be able to report that we
will see a return on this investment within a relatively short
period of time.
This is a vital component within the emerging value cycle
solutions market, representing a market opportunity several times
larger than that of our existing product portfolio.
Sales and Marketing
We have seen positive sales momentum, securing new sales in the
period across all sizes, classes and types of hospital customer. We
continued to secure strong levels of sales for both our core
products, Chargemaster Toolkit and Pharmacy ChargeLink, and
encouraging sales of our first Trisus products. The sales activity
has continued into the second half of the year and the sales
pipeline continues to grow at record levels, all combining to
provide further confidence in continued long term growth.
The average length of contracts with new customers continues to
be in-line with our historical norms of approximately five years.
With the adoption of the Trisus Bridge by the majority of our
customer base, we are in a strong position to offer customers a
viable and secure method of transitioning to our cloud based
platform at a pace that suits them.
At the end of any contract term, we expect to see our renewal
rates remain at their current high levels (above 100% by dollar
value), along with additional sales, as customers move to the
improvements brought to them by the Trisus platform.
Financial Review
We are pleased to announce an increase in adjusted EBITDA of 20%
to $11.6m (H118: $9.7m) driven by an increase in revenues in the
period of 15% to $35.9m (H118: $31.1m). These results are
reflective of both our continued efficient approach to investments
across all areas of the company and our prudent approach to revenue
recognition, through our Annuity SaaS business model (described
below).
This has ultimately led to a 19% increase in adjusted earnings
per share to 30.2 cents per share compared with 25.4 cents per
share for this same period last year. All underlying metrics
continue to be in line with, or above, our historical norms.
In January 2018, we completed a share buyback returning $15.4m
to shareholders. In the period we have returned $4.7m to our
shareholders through dividends, invested $9.1m in research and
development (including $4.4m in new product development which has
been capitalised) and made the commission payments relating to the
sales announced in the prior year. We continue to maintain healthy
cash reserves which at the period end were $38.7m (H118: $52.2m),
meeting our 100% of adjusted EBITDA to operating cash over the
trailing 12 month period target. Following exceptionally high
levels of cash collection in the second half of the prior financial
year, cash conversion levels in the period were as anticipated,
with a further $10m of December 2018 outstanding receivables
collected since the period end.
In the period, the Group has, for the first time, adopted IFRS
15 "Revenue from Contracts with Customers", which has not resulted
in any material changes to our historical approach to revenue
recognition. To ensure compliance the Group has tested revenue
recognised under its Annuity SaaS business model against the
five-step model determined by the standard.
The five-step model is as follows
1) Identify the contract(s) with a customer
2) Identify the performance obligations in the contract
3) Determine the transaction price
4) Allocate the transaction price to the performance obligations in the contract
5) Recognise revenue when or as the entity satisfies its performance obligations
The Group's Annuity SaaS business model and associated revenue
recognition policy has always been designed to focus on the
long-term growth and stability of the Group. The main revenue
element of new sales relates to software licenses, where results in
performance obligations are being met over time and as such revenue
is being recognised over the period the license is provided to the
customer (which for a new hospital sale is an average of five
years). In addition, other revenue generated through new sales
relates to consulting services and training which are also
satisfied over time as the service is provided or the project is
delivered.
We have previously identified that there are a number of
benefits to this revenue recognition model including high levels of
cash conversion, high levels of future years' revenue visibility
and, by renewing our customer base at over 100% (by dollar value),
each new sale adds to the Group's annuity base of revenue. This
continues to be the case and having completed our assessment, we
did not identify any material differences between the requirements
of IFRS 15 and our existing revenue recognition policy.
To demonstrate the high levels of visible revenue generated as a
result of new sales under our business model the Group reports its
Three Year Visible Revenue KPI. This KPI also demonstrates the
underlying annuity revenue stream that is also building as a result
of sales and these revenue recognition policies.
Total visible revenue for the three year period 1 July 2018 to
30 June 2021 has grown 13% to $196.2m from $174.3m for the same
three year period at 31 December 2017. Of this $196.2m, $157.3m
relates to 'Revenue under Contract', $38.4m 'Renewal Revenue' and
$0.5m of 'Other Recurring Revenue'. 'Revenue under Contract',
relates to revenues that are supported by ongoing underlying
contracts. 'Renewal Revenue' relates to the amount of revenue which
is potentially available for renewal and will be recognised in that
fiscal year provided the underlying contracts are renewed. In
calculating this, we assume a 100% dollar value renewal level. As
we sign renewals the aggregated related revenue for the new
multi-year term moves from 'renewal revenues' to 'revenue under
contract'. The final element is 'Other Recurring Revenue', this
relates to revenue that is not subject to long term contracts,
which can be billable 'per transaction' or a set monthly amount and
is usually invoiced on a monthly basis, however it is reasonable to
expect it to be recurring in nature.
As we show our 'Renewal Revenue' in our revenue visibility graph
at 100% of dollar value, we track and publish our 'Renewal Rate by
dollar value KPI' to ensure our 100% assumption in producing our
revenue visibility KPI is still appropriate. This KPI measures the
average value of customers renewing in the relevant period
(including cross sell and upsell to those renewing customers) and
was 101% in this current period under review.
These high levels of visible revenue provide certainty in
investment decisions. These investments include our investment in
R&D of $9.1m (H118: $7.8m) of which $4.6m relates to products
currently available for sale and as such has been expensed in the
period. The balance of $4.4m (H118: $2.1m) relates to new product
development and as such has been capitalised. We continue to make
these and other investment decisions as appropriate for the future
growth of the Group, whilst consistently ensuring the efficiency of
all expenditures. This has contributed to our adjusted EBITDA
margin, which for the period is 32%. The adjustments we make to
both EBITDA and EPS are those normally expected and include costs
related to acquisition and share activity in the period.
We continue to report the results (and hold the cash reserves)
of the Group in US Dollars, whilst having approximately twenty five
percent of our costs, mainly our UK employees and UK purchases,
denominated in Sterling. The average exchange rate for the Company
during the reporting period was $1.30/GBP1 which compares to
$1.32/GBP1 in the corresponding period last year.
Dividend
The Board has resolved to pay an interim dividend of 11p (14.0
cents) per ordinary share on 11 April 2019 to those shareholders on
the register as at 15 March 2019 (FY18 interim dividend 10p). The
ex-dividend date is 14 March 2019.
The interim dividend of 11p per share is capable of being paid
in US dollars subject to a shareholder having registered to receive
their dividend in US dollars under the Company's Dividend Currency
Election, or who has registered to do so by the close of business
on 15 March 2019. The exact amount to be paid will be calculated by
reference to the exchange rate to be announced on 15 March 2019.
The interim dividend referred to above in US dollars of 14.0 cents
is given as an example only using the Balance Sheet date exchange
rate of $1.27/GBP1 and may differ from that finally announced.
Outlook
As we enter the second half of the financial year we do so with
excitement as we continue to build the business in line with the
large market opportunity available to us. The business continues to
deliver strong growth rates, powered by the expansion of our
product suite. We believe that the breadth of our customer base and
the quantity and quality of data within our solutions means we have
the opportunity to sit at the heart of the move to value-based
economics; collating and analysing the information that will
support hospital-wide decision making and ultimately have a
positive impact on the quality of healthcare.
Our growing market opportunity, the strength of our sales
pipeline and increasing long-term revenue visibility, mean we enter
the second half of the financial year with great confidence for the
future and the ongoing success of Craneware.
Keith Neilson Craig Preston
CEO CFO
4 March 2019 4 March 2019
Craneware PLC
Interim Results FY19
Consolidated Statement of Comprehensive
Income
H1 2019 H1 2018 FY 2018
Notes $'000 $'000 $'000
------------------------------------------ ------- --------- --------- ---------
Revenue 35,853 31,138 67,067
Cost of sales (2,292) (1,593) (3,407)
--------- --------- ---------
Gross profit 33,561 29,545 63,660
Net operating expenses (24,376) (21,048) (44,968)
--------- --------- ---------
Operating profit 9,185 8,497 18,692
Analysed as:
Adjusted EBITDA(1) 11,578 9,689 21,611
Share-based payments (740) (165) (663)
Depreciation of plant and equipment (308) (292) (578)
Amortisation of intangible assets (1,345) (735) (1,678)
--------------------------------------------------- --------- --------- ---------
Finance income 114 169 241
--------- --------- ---------
Profit before taxation 9,299 8,666 18,933
Tax charge on profit on ordinary
activities (1,590) (1,990) (3,136)
--------- --------- ---------
Profit for the period attributable
to owners of the parent 7,709 6,676 15,797
Other comprehensive income
Items that may be reclassified
subsequently to profit or loss
Currency Translation Reserve movement 22 (19) (10)
--------- --------- ---------
Total items that may be reclassified
subsequently to profit or loss 22 (19) (10)
--------------------------------------------------- --------- --------- ---------
Total comprehensive income attributable
to owners of the parent 7,731 6,657 15,787
--------------------------------------------------- --------- --------- ---------
(1) Adjusted EBITDA is defined as operating profit before,
share based payments, depreciation and amortisation.
Earnings per share for the period attributable to equity holders
- Basic ($ per share) 1a 0.289 0.248 0.590
- *Adjusted Basic ($ per share)(2) 1a 0.302 0.254 0.602
- Diluted ($ per share) 1b 0.283 0.242 0.579
- *Adjusted Diluted ($ per share)(2) 1b 0.296 0.248 0.591
------------------------------------------ ------- --------- --------- ---------
(2) Adjusted Earnings per share calculations allow for the tax
adjusted acquisition costs and share related transactions (if
applicable in the year) together with amortisation on acquired
intangible assets.
Craneware PLC
Interim Results FY19
Consolidated Statement of Changes in Equity
-------------------------------------------------------------------------------------------------------
Capital
Share Redemption Other Retained
Share Capital Premium Reserve Reserves Earnings Total
$'000 $'000 $'000 $'000 $'000 $'000
--------------------------- -------------- --------- ------------ ---------- ---------- ---------
At 1 July 2017 537 17,974 - 958 39,886 59,355
Total comprehensive
income - profit for
the period - - - - 6,676 6,676
Total other comprehensive
income - - - - (19) (19)
Transactions with owners
Share-based payments - - - 480 814 1,294
Impact of share options
exercised / lapsed - (2) - (7) - (9)
Dividend - - - - (4,066) (4,066)
--------------------------- -------------- --------- ------------ ---------- ---------- ---------
At 31 December 2017 537 17,972 - 1,431 43,291 63,231
--------------------------- -------------- --------- ------------ ---------- ---------- ---------
Total comprehensive
income - profit for
the period - - - - 9,121 9,121
Total other comprehensive
income - - - - 9 9
Transactions with owners
Company share movement
in employee benefit
trust - - - - (4,248) (4,248)
Buyback and cancellation
of shares (9) - 9 - (15,378) (15,378)
Share-based payments - - - 1,023 (180) 843
Impact of share options
exercised / lapsed 6 1,805 - (370) 378 1,819
Dividend - - - - (3,751) (3,751)
At 30 June 2018 534 19,777 9 2,084 29,242 51,646
--------------------------- -------------- --------- ------------ ---------- ---------- ---------
Total comprehensive
income - profit for
the period - - - - 7,709 7,709
Total other comprehensive
income - - - - 22 22
Transactions with owners
Share-based payments - - - 740 607 1,347
Impact of share options
exercised / lapsed 1 244 - - - 245
Dividend - - - - (4,713) (4,713)
--------------------------- -------------- --------- ------------ ---------- ---------- ---------
At 31 December 2018 535 20,021 9 2,824 32,867 56,256
--------------------------- -------------- --------- ------------ ---------- ---------- ---------
Craneware PLC
Interim Results FY19
Consolidated Balance Sheet as at 31 December
2018
H1 2019 H1 2018 FY2018
Notes $'000 $'000 $'000
-------------------------------- ------- -------- -------- -------
ASSETS
Non-Current Assets
Plant and equipment 1,351 1,264 1,223
Intangible assets 26,359 21,542 23,267
Trade and other receivables 2 5,253 4,683 5,275
Deferred Tax 4,599 4,073 3,831
37,562 31,562 33,596
-------- -------- -------
Current Assets
Trade and other receivables 2 20,852 22,356 12,503
Cash and cash equivalents 38,668 52,205 52,833
59,520 74,561 65,336
-------- -------- -------
Total Assets 97,082 106,123 98,932
-------------------------------- ------- -------- -------- -------
EQUITY AND LIABILITIES
Non-Current Liabilities
Deferred income - 48 -
- 48 -
-------- -------- -------
Current Liabilities
Deferred income 33,094 32,173 35,371
Current tax liabilities 420 1,531 80
Trade and other payables 3 7,312 9,140 11,835
40,826 42,844 47,286
-------- -------- -------
Total Liabilities 40,826 42,892 47,286
-------- -------- -------
Equity
Called up share capital 4 535 537 534
Share premium account 20,021 17,972 19,777
Capital redemption reserve 9 - 9
Other reserves 2,824 1,431 2,084
Retained earnings 32,867 43,291 29,242
Total Equity 56,256 63,231 51,646
-------- -------- -------
Total Equity and Liabilities 97,082 106,123 98,932
-------------------------------- ------- -------- -------- -------
Craneware PLC
Interim Results FY19
Consolidated Statement of Cash Flow for the six months ended
31 December 2018
H1 2019 H1 2018 FY 2018
Notes $'000 $'000 $'000
----------------------------------------- ------ --------- -------- ---------
Cash flows from operating activities
Cash generated from operations 5 (3,527) 6,046 33,110
Interest received 114 169 227
Tax paid (1,413) (821) (3,349)
----------------------------------------- ------ --------- -------- ---------
Net cash from operating activities (4,826) 5,394 29,988
Cash flows from investing activities
Purchase of plant and equipment (436) (183) (434)
Capitalised intangible assets (4,435) (2,110) (4,258)
----------------------------------------- ------ --------- -------- ---------
Net cash used in investing activities (4,871) (2,293) (4,692)
Cash flows from financing activities
Dividends paid to company shareholders (4,713) (4,066) (7,817)
Proceeds from issuance of shares 245 - 1,810
Company shares acquired by employee
benefit trust - - (4,248)
Buy back of ordinary shares - - (15,378)
----------------------------------------- ------ --------- -------- ---------
Net cash used in financing activities (4,468) (4,066) (25,633)
Net (decrease)/increase in cash
and cash equivalents (14,165) (965) (337)
Cash and cash equivalents at the
start of the period 52,833 53,170 53,170
Cash and cash equivalents at the
end of the period 38,668 52,205 52,833
----------------------------------------- ------ --------- -------- ---------
Craneware PLC
Interim Results FY19
Notes to the Financial Statements
1. Earnings per Share
(a) Basic
Basic earnings per share is calculated by dividing the profit
attributable to equity holders of the Company by the weighted
average number of ordinary shares in issue during the period.
----------------------------------------------------------------------------
H1 2019 H1 2018 FY 2018
---------------------------------------------- -------- -------- --------
Profit attributable to equity holders
of the Company ($'000) 7,709 6,676 15,797
Weighted average number of ordinary
shares in issue (thousands) 26,682 26,962 26,790
Basic earnings per share ($ per share) 0.289 0.248 0.590
-------- -------- --------
Profit attributable to equity holders
of the Company ($'000) 7,709 6,676 15,797
Tax adjusted acquisition costs, share
related transactions and amortisation
of acquired intangibles ($'000) 353 165 329
-------- -------- --------
Adjusted Profit attributable to equity
holders ($'000) 8,062 6,841 16,126
-------- -------- --------
Weighted average number of ordinary
shares in issue (thousands) 26,682 26,962 26,790
Adjusted Basic earnings per share ($
per share) 0.302 0.254 0.602
-------- -------- --------
(b) Diluted
For diluted earnings per share, the weighted average number
of ordinary shares calculated above is adjusted to assume
conversion of all dilutive potential ordinary shares. The
Group has one category of dilutive potential ordinary shares,
being those granted to Directors and employees under the share
option scheme.
----------------------------------------------------------------------------
H1 2019 H1 2018 FY 2018
---------------------------------------------- -------- -------- --------
Profit attributable to equity holders
of the Company ($'000) 7,709 6,676 15,797
Weighted average number of ordinary
shares in issue (thousands) 26,682 26,962 26,790
Adjustments for: - share options (thousands) 561 613 492
Weighted average number of ordinary
shares for diluted earnings per share
(thousands) 27,243 27,575 27,282
Diluted earnings per share ($ per share) 0.283 0.242 0.579
-------- -------- --------
1. Earnings per share (Cont.)
H1 2019 H1 2018 FY 2018
---------------------------------------------- -------- -------- --------
Profit attributable to equity holders
of the Company ($'000) 7,709 6,676 15,797
Tax adjusted acquisition costs, share
related transactions and amortisation
of acquired intangibles ($'000) 353 165 329
Adjusted Profit attributable to equity
holders ($'000) 8,062 6,841 16,126
-------- -------- --------
Weighted average number of ordinary
shares in issue (thousands) 26,682 26,962 26,790
Adjustments for: - share options (thousands) 561 613 492
Weighted average number of ordinary
shares for diluted earnings per share
(thousands) 27,243 27,575 27,282
Adjusted Diluted earnings per share
($ per share) 0.296 0.248 0.591
-------- -------- --------
2. Trade and other receivables
H1 2019 H1 2018 FY 2018
$'000 $'000 $'000
----------------------------------------- -------- -------- --------
Trade Receivables 16,670 19,556 9,215
Less: provision for impairment of trade
receivables (1,172) (1,630) (1,072)
-------- -------- --------
Net trade receivables 15,498 17,926 8,143
Other Receivables 521 288 230
Prepayments and accrued income 2,487 2,212 1,904
Deferred Contract Costs 7,599 6,613 7,501
-------- -------- --------
26,105 27,039 17,778
Less non-current receivables: Deferred
Contract Costs (5,253) (4,683) (5,275)
-------- -------- --------
Trade and other receivables 20,852 22,356 12,503
-------- -------- --------
------There is no material difference between the fair value of
trade and other receivables and the book value stated above.
3. Trade and other payables
H1 2019 H1 2018 FY 2018
$'000 $'000 $'000
-------- -------- --------
Trade Payables 841 493 824
Social Security and PAYE 425 327 461
Other Payables 215 124 41
Accruals 5,831 8,196 10,509
------ ------ -------
Trade and other payables 7,312 9,140 11,835
------ ------ -------
Derivatives held for hedging have been measured at fair value.
The inputs used in determining the fair value are based on
observable market data therefore the balances are categorised as
level 2 under IFRS 13. No derivatives have been entered into in the
current reporting period. No other assets or liabilities have been
measured at fair value.
4. Called up share capital
H1 2019 H1 2018 FY 2018
Number $'000 Number $'000 Number $'000
---------------------------- ----------- ------ ----------- ------ ----------- ------
Authorised
Equity share capital
Ordinary shares of 1p
each 50,000,000 1,014 50,000,000 1,014 50,000,000 1,014
Allotted called-up and
fully paid
Equity share capital
Ordinary shares of 1p
each 26,681,612 535 26,961,709 537 26,662,271 534
5. Consolidated Cash Flow generated from operating
activities
Reconciliation of profit before taxation to
net cash inflow from operating activities:
H1 2019 H1 2018 FY 2018
$'000 $'000 $'000
------------------------------------- -------- -------- --------
Profit before taxation 9,299 8,666 18,933
Finance income (114) (169) (241)
Depreciation on plant and equipment 308 292 578
Amortisation on intangible assets 1,345 735 1,678
Share-based payments 740 165 663
Movements in working capital:
(Increase)/Decrease in trade
and other receivables (8,327) (7,380) 1,881
Increase/(Decrease) in trade
and other payables (6,778) 3,737 9,608
Cash generated from operations (3,527) 6,046 33,110
------------------------------------- -------- -------- --------
6. Basis of Preparation
The interim financial statements are unaudited and do not
constitute statutory accounts as defined in S435 of the Companies
Act 2006. These statements have been prepared applying accounting
policies that were applied in the preparation of the Group's
consolidated accounts for the year ended 30th June 2018. Those
accounts, with an unqualified audit report, have been delivered to
the Registrar of Companies.
7. Segmental Information
The Directors consider that the Group operates in predominantly
one business segment, being the creation of software sold entirely
to the US Healthcare Industry, and that there are therefore no
additional segmental disclosures to be made in these financial
statements.
8. Changes to Significant Accounting Policies
Except as described below, the accounting policies applied in
these interim financial statement are the same as those applied in
the Group's consolidated financial statements as at and for the
year ended 30 June 2018.
The changes in accounting policy set out below will also be
reflected in the Group's consolidated financial statements for the
year ended 30 June 2019.
IFRS 15 Revenue from contracts with Customers
The Group has adopted IFRS 15 Revenue from Contracts with
Customers from 1 July 2018 using the cumulative effect transition
method. Under the cumulative effect method, the impact of initially
applying the standard will be reflected as an adjustment to the
opening balance of retained earnings as of 1 July 2018 and the
comparative period will not be restated.
The new standard requires revenue to be recognised using a
five-step model which requires the transaction price for each
contract to be apportioned to separate performance obligations
arising under the contract either when the performance obligation
in the contract has been performed (point in time recognition) or
over time as control of the performance obligation is transferred
to the customer. The five-step model is as follows
1) Identify the contract(s) with a customer
2) Identify the performance obligations in the contract
3) Determine the transaction price
4) Allocate the transaction price to the performance obligations in the contract
5) Recognise revenue when or as the entity satisfies its performance obligations
The Group's main revenue category is the sale of software
licenses which results in performance obligations being met over
time, with revenue recognised over the period the license is
provided to the customer. Other revenue relates to consulting
services and training which are also satisfied over time as the
service is provided or the project is delivered.
The Group has completed its assessment of IFRS 15 and has not
identified any material differences between the requirements of
IFRS 15 and the previous revenue recognition policy. Accordingly no
financial restatement has been made.
IFRS 9 Financial Instruments
The Group has adopted IFRS 9 Financial Instruments from 1 July
2018, replacing IAS 39 Financial Instrument: Recognition and
Measurement.
IFRS 9 replace the existing credit loss model with a forward
looking expected credit loss model for assessing the impairment of
financial assets. Adopting this new model has not had a material
impact and accordingly no financial restatement has been made. The
new standard has not had a significant effect on the Group's
accounting policy.
IFRS 9 largely retains the existing requirements in IAS 39 for
the classification and measurement of financial liabilities and has
not had a significant effect on the Group's accounting policy.
9. Availability of announcement and Half Yearly Financial
Report
Copies of this announcement are available on the Company's
website, www.craneware.com. Copies of the Interim Report will be
posted to shareholders, downloadable from the Company's website and
available from the registered office of the Company shortly.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR EAEDLEFKNEAF
(END) Dow Jones Newswires
March 05, 2019 02:01 ET (07:01 GMT)
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